By Nathan Ferguson
Non-fungible tokens (NFTs) witnessed a huge boom in 2021. However, that hype gradually cooled down as the whole cryptocurrency was hit by the extended crypto winter. The prices of the crypto assets dropped much lower than their previous highs and eventually, the fading NFT interest pushed down the prices of non-fungible tokens. Nonetheless, the crypto bear market is now seeing a likely silver lining known as tax-loss harvesting.
NFT Investors Rush to Unsellable to Dump Their Valueless NFTs to Counterbalance Tax Losses
Through this method, NFT investors can counterbalance the losses on their less valuable digital assets. They are using the services offered by Unsellable. The firm was launched in the previous month and has attracted a great number of crypto community members who have been skeptical about the operations of this industry. Unsellable purchases the non-fungible tokens that will not be purchased by anyone else.
In this way, the former owner can utilize them to counterbalance their tax losses. The web portal of the company names its services as “Web3 junk removal” and “Instant Liquidity” platforms. Since it was introduced, the firm has witnessed elevated activity and the NFT investors are discarding their valueless digital collectibles. At present, the cumulative number of digital assets in the collection of Unsellable is more than 15,000, as per Etherscan data.
Unsellable additionally has an NFT collection based on OpenSea. The respective collection comprises up to 4.6k non-fungible tokens. Token 75 (an NFT from Kleeee02 NFTs) is considered to have the most worth. The token was last traded for nearly 7 ETH back in 2021’s August. Keeping in view that ETH’s value is currently above $3000, the non-fungible token would have caused up to $21,000 to the owner.
Currently, the top bid for the respective token is up to 0.0043 WETH (almost $5.15) on OpenSea. The company additionally permits consumers to trade their NFTs in bulk form. It allows the trading of nearly 1000 non-fungible tokens in one transfer. A consumer traded many non-fungible tokens taken from the GoopGirls collection. Another one traded many Derpy Birds WanderVerse-based NFTs.
Unsellable currently supports just the Ethereum blockchain. Every transfer costs approximately 0.0033 ETH (equaling $4). Several non-fungible tokens, if transacted in one go, cost a fee lower than 0.08 ETH (nearly $95) in addition to gas. The Internal Revenue Service (IRS) of the United States recently categorized non-fungible tokens as the assets on which the capital gains tax will be implemented.
Community Members Question the Legality of This Unique Tax-Cutting Method
Under this category, investors require reporting any digital asset traded to make income to the relevant authorities. In the meantime, the laws implemented in the United States permit the investors to counterbalance the capital loss through the rest of the capital profits. A few members of the crypto community have condemned the venture. Many other community participants questioned if this was legitimate, while the rest of them classified it as tax evasion.
The non-fungible tokens bought by the portal take into account the Anatomy Science Ape Club, Lost Nouns, and so on. The fame of Unsellable comes at a time when the traders who once got profits are now pursuing to minimize their losses. In 2021’s December and 2022’s January, the majority of the non-fungible tokens had their top prices in the dollar. The upsurge in the price of non-fungible tokens was paralleled by the highest trading volumes.